Study On Risk Management Of Commercial Bank M&A Loan In China

The Banking Regulatory Commission of China introduced a guideline about M&A loan riskmanagement to the commercial bank on December9,2008, which was an epochal significance tocommercial bank and would have a huge impact on our financial deepening reform. This wasbecause that the guideline allowed commercial banks to provide funding for M&A activity such asequity trading and asset transactions; allowed the enterprise to use its future earnings as a source ofrepayment and to use the future acquired enterprise's equity and assets as loan guarantees. In thepast four years, M&A loans experienced a process from simple to complex, had a trend of gradualand healthy development, which was a strong support to Chinese enterprise's overseas mergersacquisitions and internal restructuring. Absolutely these things couldn't be separated from theregulatory authorities' effective guide and the main market player's active participation.However, cause the M&A loan involved the both sides of mergers and acquisitions enterprises,which included the industry, applicable law, ownership structure, debt, identified asset prices, theloan risk was significantly higher than normal loans. In that case, we had the necessary and veryurgent needs of researching how to start the M&A loans and how to manage risk of the M&A loans.As a result we could unite the safety, liquidity, profitability of the M&A loans.This article analyze the M&A loan's connotation, various types of risk, and comparative studythe domestic and foreign commercial bank's M&A loan risk management status, then get the M&ALoan risk management experience of developed countries and realize the M&A loan riskmanagement deficiencies of commercial banks in China, finally proposed the M&A loan riskmanagement policy recommendations of the commercial banks in China. The core of this article isto propose the trinity mode of financial advisers, M&A loan, property rights trading market, andpropose the operation of the process before the loan, in the loan, after loan, so as to manage the loanrisk effectively and expect to get the dialectical unity of security, profitability, liquidity of thecommercial bank, finally achieve the maximum value.